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Lumley sale among $1 billion of Dexus transactions

Dexus Property Group confirmed on Thursday that it had sold the Lumley Centre in Auckland to German pension fund Deka Immobilien Investment GmbH for $146 million.

Dexus put the building on the market at the end of April and Deka began a month of due diligence in July. The sale was one in a flurry of about $1 billion of transactions by Dexus and completes its exit from offshore markets.

The 19,479m² building at 88 Shortland St has 15 office floors, and 6 levels of parking for 194 cars accessed from Fort St. Mansons TCLM Ltd built it in 2005.

It was independently valued for Dexus’ June 2013 accounts at $127.5 million, with an initial yield of 7.37%, but was on the group’s books at $140 million. That puts the sale price at a 14.5% premium to 2013 valuation and a 4.3% premium to book value.

Dexus’ other transactions & annual result

A Chinese group has started due diligence on an office tower at 201 Elizabeth St in the Sydney cbd, jointly owned by Dexus & the Perron Group, which the Australian newspaper said could be sold for $A400 million for conversion into $A1 billion of apartments. Dexus described it as “a compelling offer”.

On Wednesday, Dexus announced the $A190 million sale of a development site at Rosebery, in south-west Sydney, to Meriton Apartments and the $A88 million sale of50 Carrington St, in the Sydney cbd, which the Australian understood Brookfield Office Properties was buying.

In July, Dexus said the co-owner of 201 Kent St, in the Sydney cbd, had exercised its pre-emptive right to acquire the property. Settlement of the $A173 million transaction is scheduled for 1 September. That’s the last of the pre-emptive rights resulting from Dexus’ April takeover of the Commonwealth Office Property Fund.

On Friday, Dexus said it made a net profit of $A406.6 million for the June year, lifted funds from operations by 7.6% to $A410.6 million A8.34c/security), increased net tangible assets by 0.8% to $A1.06/ security and had a 6.7% return on equity (8.7% excluding the impact of its $A3.4 billion takeover of the Commonwealth fund with the Canada Pension Plan Investment Board). It’s contained its gearing at 33.7%.

Dexus chief executive Darren Steinberg said the group expected to grow funds from operations & distributions/security by 8.5% in 2015.

Deka, the Lumley Centre buyer, is an active investor in property and has €16 billion of real estate assets under management.

Attribution: Dexus releases, the Australian.

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World property Sn22June14 – Goodman HK issue popular, Future Fund partners Dexus, international insights

First $US400 million of Goodman HK note programme heavily oversubscribed
Dexus takes Future Fund into Greystanes industrial partnership
Some insights into the big bad world….

First $US400 million of Goodman HK note programme heavily oversubscribed

Goodman Group’s Goodman HK Finance Ltd gave notice on 4 June that it applied to list a $US2 billion euro medium-term note programme for the Goodman Hong Kong Logistics Fund on the Hong Kong Stock Exchange, and said last week the first $US400 million offer of 4.375% 10-year guaranteed notes was 4.5 times oversubscribed by institutional investors.

At 31 March, the fund had a $HK19.2 billion ($NZ2.85 billion) portfolio. Goodman’s greater China managing director, Philip Pearce, said the new money would be used to repay existing debt facilities, in line with its strategy of extending debt maturities and diversifying funding sources.

Dexus takes Future Fund into Greystanes industrial partnership

Dexus Property Group said on Thursday it had established a 50:50 industrial property capital partnership with Australian sovereign wealth fund, the Future Fund. The partnership transaction is scheduled to settle next Thursday, 26 June.

The first investment of the Dexus Industrial Partnership will be the Quarrywest at Greystanes industrial development site in Sydney’s outer-west. The 25.6ha site is across Reconciliation Rd from another ex-quarry site where Dexus sold 50% of 17 properties into another partnership last year.

The whole of the former Prospect quarry, now being turned into industrial land, is a few minutes from the interchange of Sydney’s M4 & M7 motorways.

The partnership has exercised a call option to acquire land off-market from quarry owner Boral Ltd for $A50.5 million and a contract will be entered into with Boral to undertake landform works. Dexus said the partnership intended to progressively develop new facilities on a pre-lease or speculative basis over 3 years, starting July 2016.

The Future Fund’s portfolio was valued at $A98 billion at 31 March. $A5.14 billion (5.3%) of it is in real estate.

Some insights into the big bad world….

If you feel like frightening yourself – or becoming at least slightly more informed about world events that impact on life right down to where you live – take this little tour…

On a Twitter catchup this afternoon, I stopped at a link posted by’s Patrick Reynolds to an article in the Yemen Times, previously appearing in The Spectator, by Douglas Murray, associate director of the Henry Jackson Society and an author, most recently of Islamophilia, who also founded the Centre for Social Cohesion, which monitors extremism in Britain. He wrote, on the Mid-East conflicts, thatcertain themes are emerging”.

Next stop, the Henry Jackson Society. Who? This society is a UK thinktank named after a US senator who died in 1983 (a link to him is below). The sixth of its 8 principles is that it “believes that only modern liberal democratic states are truly legitimate” – and it will support the fight to sustain democracy & capitalism.

On my stop at the Henry Jackson Society, I read 2 articles by Dr Andrew Foxall (originally published in Forbes) on the wars Russia was already deep in well before the Ukraine, which related to Russia as a nation and to its nationalist, geographic, ethnic & religious conflicts.

Along the way I also stopped at the Texan geopolitical intelligence firm Stratfor’s website, for another eye on the Mid-East conflicts.

It’s worth remembering, I figure as we head into the last 3 months before an election in this tame backwater, what havoc these international events might wreak and who among our leaders might understand how to deal with a greatly changed, unpredictable future.

And now, for me, back to the local havoc – of determination to increase congestion, of the continuing failure to address not just affordability of housing but the stripping out of multi-millions of investment dollars through bad or non-existent policy – and the brighter lights of more frequent commercial property transactions….

Links: Transportblog
Why the great Sunni-Shia conflict is getting ever closer to the surface
Who was Henry Jackson?
HJS, The conflict in the Middle East is far bigger than ISIS & Al Quaeda
Beyond Ukraine, Russia is already at war
The intrigue lying behind Iraq’s jihadist uprising

Attribution: Goodman, Dexus, multiple sources above

Regular leads: Europe Real Estate, Mingtiandi, Planetizen, World Property Channel

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World property W5Feb14 – Dexus unconditional

Dexus unconditional on revised Commonwealth offer

Dexus Property Group, partnered by the Canada Pension Plan Investment Board, appears to have won the fight for the Commonwealth Property Office Fund.

GPT’s offer for Commonwealth lapsed on 24 January and, on 29 January, the Dexus partnership declared its offer unconditional. It was also extended to Friday 14 February.

Commonwealth’s directors once again recommended acceptance, in the absence of a superior offer.

Dexus and the Canadian fund gave notice on 14 January that they controlled 25.45% of the Commonwealth fund. The joint venture offered Commonwealth investors a varied bid on 10 January, increasing the cash component and reducing the Dexus securities, but leaving both options on the table: A77.45c cash plus 0.4516 of a Dexus security, or A84.96c cash plus 0.3801 of a Dexus security for every Commonwealth unit.

Attribution: Commwealth Property, Dexus, GPT

Regular leads: Europe Real Estate, Mingtiandi, Planetizen, World Property Channel

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World property F17Jan14 – Dexus buys at 9.1%, Starwood gets 2 new Melbourne hotels (updated)

Dexus buys in Brisbane cbd at 9.1%
Hiap Hoe calls Starwood in to manage 2 new Melbourne hotels

Dexus buys in Brisbane cbd at 9.1%

Dexus Wholesale Property Fund has bought a fully leased office building in the Brisbane cbd, AM60 at 42-60 Albert St (corner of Margaret St) from LaSalle Investment Management for $A161.3 million (excluding acquisition costs), at a 9.1% yield.

The 21-level A grade tower was completed in 2009. It has 21,263m² of office & retail, 120 basement parking spaces and a 5-star Nabers energy rating, a weighted average lease expiry of 4.3 years and no major expiries until August 2017.

Fund manager Graham Pearson said the Brisbane cbd had limited near-term supply and medium to long-term growth potential.

Dexus Wholesale Property Fund is a $A4.8 billion open-ended unlisted property fund. Dexus’ key portfolio statistics at June 2013 show the fund held 34 properties worth $A4.3 billion, and their weighted average capitalisation rate was 6.87%. The listed Dexus Property Group has $A13 billion of property under management, including the wholesale portfolio and properties managed for third-party capital partners.

Dexus and the Canada Pension Plan Investment Board have a takeover bid for the Commonwealth Property Office Fund under way and gave notice on 14 January that they controlled 25.45% of the Commonwealth fund.

The joint venture offered Commonwealth investors a varied bid on 10 January, increasing the cash component and reducing the Dexus securities, but leaving both options on the table: A77.45c cash plus 0.4516 of a Dexus security, or A84.96c cash plus 0.3801 of a Dexus security for every Commonwealth unit.

Updated: Hiap Hoe calls Starwood in to manage 2 new Melbourne hotels

Singaporean developer Hiap Hoe Ltd said on 9 January it had signed letters of intent for Starwood to manage the 2 hotels to be built at 6-22 Pearl River Rd & 380 Lonsdale St in Melbourne.

The agreements are with Starwood Hotels & Resorts Worldwide Inc’s Singaporean subsidiary, Starwood Asia Pacific Hotels & Resorts Pte Ltd. The brands the hotels would operate under have not yet been disclosed [Wrong: I didn’t spot the mentions – see below].

Hiap Hoe incorporated an Australian development subsidiary on 7 January, Meteorite Development (Bourke Street) Pty Ltd.

Update 18 January 2014: Hiap Hoe said the hotels would be a Four Points on Pearl River Rd and an Aloft on Lonsdale St. The company said last October the Aloft would be a 350-room hotel. It’s since said the Four Points would have 300 rooms.

Earlier story, Singapore developer Hiap Hoe buys second Melbourne apartment site, seeks full ownership of partner back home

Attribution: Dexus, Hiap Hoe

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Major restructure at Deutsche Bank Australia Real Estate

Deutsche Bank’s 3 Australian listed trusts are to merge into an expanded new property trading group, DB RREEF Trust.

The series of transactions was announced in Sydney on Wednesday.

Deutsche Office Trust’s $NZ110.4 million purchase of the NRM Tower in Auckland from Manson Securities Ltd is a part of the whole expansion.

Other features include some trading of retail properties with the Westfield Group and acquisition of 80% of an $A1.5 billion US industrial portfolio.

The new trust will be Australia’s 4th-largest listed property group with a market capitalisation expected to exceed $A3.5 billion. It will be headed by former Chase Corp and Westfield Group executive Victor Hoog Antink, who became head of Deutsche Bank Real Estate Australia Ltd last October.

The merger proposal comprises 4 key elements:

stapling of the listed property trusts: Deutsche Diversified Trust, Deutsche Office Trust & Deutsche Industrial Trust will be stapled with a new trading trust, and will trade as DB RREEF Trust.
partial internalisation of the management platform: DB RREEF Trust & Deutsche Bank will enter into a 50:50 partnership to manage the Australian funds management business, which has more than $A10.1 billion of funds under management. DB RREEF Trust will pay Deutsche Bank $A65 million for the half share of the management rights, valuing the transaction at 1.28% of funds under management.
the delivery of a platform to access global real estate opportunities, expertise & partners: The formation of strategic relationships with one of the world’s largest real estate equity managers, DB Real Estate, including leading US real estate equity manager RREEF; the largest US public pension fund, Calpers (the California Public Employees’ Retirement System); and the world’s largest retail property group by equity market capitalisation, the Westfield Group.
property transactions of more than $A2.4 billion.

A series of property transactions is proposed:

Agreement has been reached to acquire an 80% interest in an $A1.5 billion US industrial property portfolio, joint-ventured with Calpers and managed by RREEF
ownership of a 50% share of an $A1.5 billion national retail portfolio, owned in conjunction with & managed by the Westfield Group
the acquisition of 2 office buildings, one in Australia & one in New Zealand, for approximately $A145 million
the acquisition by the Deutsche Wholesale Property Fund of a portfolio of retail & industrial assets totalling $A312 million, and
investment by DB RREEF Trust of $A25 million in the wholesale fund, and potentially an additional $A25 million depending on unitholder demand.

The staple, the partial internalisation, the acquisition of the US property portfolio & the investment in the wholesale fund are all interconditional & subject to the approval of unitholders in all 3 existing listed trusts.

Some elements will be undertaken irrespective of the outcome of the unitholder vote, including the Auckland purchase.

“These major transactional steps form part of a cohesive & comprehensive plan to enhance returns and expand growth opportunities for unitholders in each of the listed trusts,” Mr Hoog Antink said.

“The proposal aims to deliver immediate earnings uplift & long-term earnings growth to unitholders through access to acquisition opportunities, new revenue streams, enhanced scale & market presence. It also aims to better align the manager’s interests with those of unitholders.

“The acquisition of the US industrial portfolio is an example of how we will be diversifying & broadening our earnings base. This significant addition to our portfolio is the first of what we anticipate to be a range of opportunities for our clients to take advantage of our partnership with DB Real Estate’s global platform in the US, Europe & Asia.”

Under the terms of the proposal:

Deutsche Diversified Trust unitholders will get one new stapled security for every existing unit
Deutsche Office Trust unitholders will get 0.93 new stapled securities for every existing unit,and
Deutsche Industrial Trust unitholders will get 1.51 new stapled securities for every existing unit.

The forecast distribution of the DB RREEF Trust stapled security for the 12 months to 30 June 2005 is A10.5c, & A11c for the 2006 year, a 4.4% year-on-year increase.

Grant Samuel & Associates has been appointed to give unitholders in all 3 trusts an opinion on whether the proposal is in the best interests of each trust’s unitholders.

Website: DB Real Estate

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